Permanent Account Number (PAN) is mandatory for filing income tax returns (ITR) and can be applied either online or offline. Quoting of PAN is also mandatory for transactions such as opening of a bank account, depositing cash exceeding Rs 50,000 into a bank account, opening a demat account, investment in shares/ mutual funds, and immovable property transactions etc.
Some amendments to PAN application forms have been announced recently and shall be effective from 5 December 2018. These are elaborated below:
1. Currently furnishing of father's name is mandatory in the PAN application form and this is printed on the PAN card. The amendment provides choice to the applicant on whether the name of father or mother needs to be displayed on the PAN card. Further, if the applicant’s mother is a single parent, quoting of father’s name in PAN application forms will not be mandatory.
2. The amendment also mandates that a resident person other than an individual, (e.g., Hindu Undivided family, firm, charitable trusts, association of persons, body of individuals, a local authority, company), who enters into a financial transaction of an amount aggregating to Rs 250,000 or more in a financial year, shall apply for a PAN on or before 31 May of the immediately following financial year.
3. Currently, tax authorities have been authorized to specify formats and standards for verification of documents filed with the PAN application / intimation of Aadhaar number, for ensuring secure capture and transmission of the data. Further, tax authorities are also responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to furnishing of the application forms for allotment of permanent account number/intimation of Aadhaar number. As per the latest amendment, these have now been extended to the issue of Permanent Account Number as well.
In short, it is important to apply for the PAN in a timely manner, link the same with Aadhaar where required and make sure that the PAN is shared with the persons liable to withhold the taxes to ensure seamless credit of taxes withheld.